1
HEALTH MANAGEMENT SYSTEMS, INC.
000 XXXX XXXXXX XXXXX
XXX XXXX, XXX XXXX 00000
March 15, 2001
Xxxxx Xxx, Chief Executive Officer
Medi, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Re: ASSET PURCHASE AGREEMENT AMONG MEDI, INC. ("MEDI") AND QUALITY
MEDI-CAL ADJUDICATION, INC., HEALTH RECEIVABLES, INC. AND HEALTH
MANAGEMENT SYSTEMS, INC. ("HMS") DATED JANUARY 5, 2001 (THE
"AGREEMENT")
Dear Xx. Xxx:
This letter is to memorialize our agreement that, as a result of the
reconciliation of the October 31, 2000 balance sheet detailed on Schedule 6.7.1
to the Asset Purchase Agreement with the balance sheet dated December 31, 2000,
a copy of which is attached hereto, the aggregate amount of service credits
available to HMS has been increased by a total of $196,498 (from $2,063,000, the
"Initial Service Credits" to $2,259,498, the "Final Service Credits), as
provided for on page 4 of the Agreement.
We have further agreed that this incremental $196,498 increase in service
credits (the "Additional Service Credits") will be separately applied by Medi
and HMS to offset a portion of the remaining 50% of the fees after the Initial
Service Credits are applied to each invoice. The Additional Service Credits will
be applied to the cash balance remaining on invoices after application of the
respective Initial Service Credits in nine (9) equal monthly installments
starting January 2001, to derive the "Net Cash Due" amount with respect to each
such invoice. In the event that the "Net Payment Due" in any given month is less
than 1/9th of $196,498 (i.e., less than $21,833.11), the difference shall be
carried forward as a cash credit to be applied against the following month's
invoice, in addition to that month's 1/9th.
If the foregoing correctly sets for our understanding, please sign both copies
of this letter on the space provided below and return one to the undersigned in
the envelope provided.
Sincerely,
HEALTH MANAGEMENT SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx, Chief Financial Officer
MEDI, INC.
By: /s/ Xxxxx Xxx
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Xxxxx Xxx, Chief Executive Officer
cc: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: V. Xxxxxx Xxxxxx, Esq.
Xxxxxxx, Xxxxx & Xxxxxxx XX
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
